Report Details Continued Growth in AOBs ... Thanks to a Handful of Busy Attorneys

State law intended to benefit insurance policyholders continues to generate an ever-increasing windfall for trial lawyers and the repair vendors who hire them, according to a newly updated report released today by the Florida Justice Reform Institute.

The report uses data from the Florida Department of Financial Services' Service Of Process database, updated through 2018, to show the widespread growth of Assignment of Benefits (AOB) lawsuits.

“This updated report details how out-of-control AOB lawsuits based on the one-way attorney fee continues to accelerate, driving up overall litigation and costs for policyholders,” said William Large, president of the Florida Justice Reform Institute.

But guess what?

The Florida Justice Reform Institute points its finger at a handful of lawyers filing most of the AOB lawsuits, but it fails to connect the dots on at least one embarrassing and another ironic fact: Two of the most prolific filers of AOB lawsuits -- Malik Law Group and Hale, Hale and Jacobson (the firm of Florida Justice Association spokesman Lee Jacobson) are members of the Restoration Association of Florida, the very group that contends it is opposing AOB reform on behalf of consumers.

Here's what the report says:

"... A fifth of all property AOB litigation is filed by 5 firms representing 6 attorneys. In PIP AOB lawsuits, an analogous pattern is seen. It is worth noting that PIP AOB attorneys seem to be the most prolific lawsuit filers -- for example, a search in the DFS system for PIP attorneys demonstrates that one lawyer filed over 30,000 PIP AOB lawsuits in 2018."

The report continues, "Confirming FJRI’s previous analysis of the shift from AOB starting in PIP and then moving to other coverages, there are several firms that do multiple types of AOB work. For example, the well-known Morgan & Morgan does AOB lawsuits for PIP, auto glass, and property, as does Hale, Hale & Jacobson (embarrassing) Other firms, such as Malik Law (ironic) and Emilio Stillo PA, work in at least two of these coverage areas, filing hundreds -- sometimes thousands -- of lawsuits annually."

At the heart of the AOB problem is the one-way attorney fee statute designed to give policyholders equal footing in disputes with insurers. Some vendors use AOBs to seize control of this special policyholder right, and then file expensive lawsuits based on inflated claims. Sometimes these lawsuits even happen without the policyholder's knowledge or consent.

This lawsuit-for-profit scheme has become an incentive for trial lawyers and their vendor clients -- often water damage remediation firms or auto glass shops with aggressive marketing schemes.

Updated with new data through 2018, the report, authored by FJRI counsel Ashley Kalifeh of Capital City Consulting, contains some startling insights:

For the eighth consecutive year, AOB lawsuits make up more than half of all lawsuits filed against insurers statewide.

In 2018, 18 percent more AOB lawsuits were filed than in 2017.

From 2008 to 2018, AOB lawsuits increased by over 900 percent, while total lawsuits in that same period increased just over 400 percent.

Five firms filed more than 20 percent of all property AOB lawsuits. Even worse, nine firms filed nearly 85 percent of all auto glass AOB cases.

In a troubling development, some lawyers are also setting up their own repair businesses, so they can profit from both the abuse and the lawsuits.

AOB lawsuits are still concentrated in a few Florida counties, raising questions about statistical probability. In 2018, almost half of all property AOB lawsuits were filed in Miami-Dade and Broward counties, while the vast majority of all auto glass AOB lawsuits were filed in Hillsborough and Orange counties.

"While Florida is a growth state, AOB lawsuits are growing much faster than the population, going from little more than a few hundredths of a point as a fraction of Florida’s population to nearly a full three-quarters of a percent now," said Kalifeh.

"Unfortunately, rampant AOB lawsuits threaten our confidence in the state’s legal climate," said Large. "The Legislature can help the people of Florida by standing up to the trial lawyers and passing meaningful AOB lawsuit reform."

The Florida Justice Reform Institute was created in 2005 to fight wasteful civil litigation through legislation, promote fair and equitable legal practices and provide information about the state of civil justice in Florida.

Comments

The FJRI is an anti-lawyer group funded by ? not lawyers. These numbers are really baseless and OIR should be ashamed. The most important thing the report doesn't say is why are lawsuits increasing. All they say is that they are, and that there are just a few firms that do the suits. But that says nothing about the cause.
And the Restoration Association does represent consumers because the contractors are hired by consumers. It happens their position is also the position of a real consumer group - FCAN.
A real study would look at the effect of insurance companies stalling on paying claims and low balling claims, something they have done since time began. It's a strategy to force consumers to accept low settlements. Look at the folks up in Panama City getting desperate.
So how about tieing restrictions on AOB to insurers paying claims timely and appropriately? Maybe at least to industry standards. Where's any language that helps consumers instead of taking away our benefits?

I agree with Dean . Everyone in the insurance industry as well as in the insurance restoration industry all use Xactimate estimating software that tells us what we can charge . I write an estimate with the same scope of work that the adjuster does , but for some reason their estimate is always at least half. Why do you think that is ? They change their pricing . They play unfair. The prices are determined by the zip code you live in.

Going back many, many years, any Florida native back in the day would have told you that Florida state government favors the special interests of state lawyers more than the special interests of participants in any other business or industry. (In 1591, in his play"Henry VI", Shakespeare penned "First thing we do, is kill all the lawyers!")
Florida has been and is ruled by monied special interests ... and it certainly won't change if the voters keep voting in the kinds of politicos they have been electing for the past twenty-plus years.